Colby v. Parker

• Decision Date: 18 May 1892
• Citation: 52 N.W. 693,34 Neb. 510
• Parties: COLBY v. PARKER.
• Court: Nebraska Supreme Court

34 Neb. 510

52 N.W. 693

COLBY

v.PARKER.

Supreme Court of Nebraska.

May 18, 1892.

Syllabus by the Court.

1. The testimony in the case examined, and held to establish the defense of usury.

2. Where the plaintiff claims as an indorsee of a negotiable promissory note, and the indorsement is denied in the answer, he must prove the words or form of the indorsement. It is for the court to determine its legal effect.

3. An indorsee of negotiable paper purchased before due, to be protected, must have purchased without notice of any defenses against the same, and have paid the consideration before notice of such defenses.

4. Where usury in the transaction is proved, a party who claims to have purchased the note before maturity for a valuable consideration must assume the burden of proof to show that he is a bona fide purchaser.

5. Held, that the defense of former adjudication was not sustained.

Error to district court, Gage county; BROADY, Judge.

Action by L. C. Parker against L. W. Colby on a promissory note. Verdict and judgment for plaintiff. Defendant brings error. Reversed and remanded.Griggs, Rinaker & Bibb, for plaintiff in error.

A. H. Babcock, for defendant in error.

MAXWELL, C. J.

This is an action upon a promissory note executed by Colby in favor of H. W. Parker. The answer of Colby is as follows: “(1) That he admits that on the 12th day of December, A. D. 1887, he made and delivered the promissory note set forth in plaintiff's petition, but he denies that on or about the 14th day of December, 1887, or at any other time before or subsequent to the maturity of said note, the said H. W. Parker transferred, indorsed, or delivered said promissory note to the plaintiff, and avers that the same was not indorsed by the said H. W. Parker, and that the plaintiff is not the holder or owner of the same, and that the said H. W. Parker is the real party in interest in this suit; and the defendant further denies each and every other allegation in said petition contained. (2) That on the 16th day of January, 1888, the plaintiff, L. C. Parker, commenced an action against this defendant in the county court of Gage county, Neb., to recover of and from this defendant the sum of $400, with 10 per cent. interest thereon from January 12, 1888, upon the promissory note sued upon in this action and set forth in plaintiff's petition. That thereafter the proceedings were had and done in said action so commenced against this defendant by said plaintiff, as appears by Exhibit A, hereto annexed, and made a part of this answer, which said Exhibit A is a true copy of all the proceedings so had and done in said cause in the said county court of Gage county, Neb.; by reason whereof the defendant avers and charges that the plaintiff is estopped and barred from proceeding further in this court. (3) That said note set forth in plaintiff's petition is usurious. That a greater rate of interest than 10 per cent. was contracted for, received, and reserved in the said note. That the same was made by the defendant as a renewal of another note, and included a large amount of illegal and usurious interest, wherein more than 10 per cent. interest was agreed upon and taken, amounting to the sum of $200, which amount is illegal, usurious, and should be deducted from the said note. That said claim upon which the note was based and for which it was given was originally for lumber and supplies furnished by the said H. W. Parker, and that on a settlement thereof the sum of over $200 for lumber and supplies was included therein by mistake, the same being for lumber and supplies and material which were not furnished to the defendant; of all of which facts, both as to the matter of usury and the matter of materials, the plaintiff, L. C. Parker, had full knowledge long prior to the execution of said note, and by reason whereof defendant is not indebted to the plaintiff in any sum whatever, and he asks that the same be set off against the plaintiff's claim.” The reply is a general denial. On the trial of the cause the jury returned a verdict in favor of the defendant in error for the sum of $446.10, upon which judgment was rendered. The jury also found specially that the note was not tainted with usury. Colby, in his testimony, had stated, in substance, that the original note was for $278; that the first note was dated in June, 1882; that he had paid over $100 cash as interest on the note; that there were renewals from time to time, and that the present note was the principal and accumulated interest. The original debt appears to have been contracted for lumber, and he claims that there was a mistake in the account to his prejudice. He seems to have kept no account, and his testimony upon this point is not very definite. His testimony upon the other matter, however, is not denied, and may therefore be accepted as true, that he paid as interest on $278 in five years and a half more than $222. This is far in excess of the rate of interest allowed by law, and the findings of the jury in that regard are against...